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2015 (2) TMI 1269 - HC - Indian LawsSuit for recovery of money - time limitation - whether the suit claim is barred by limitation in the light of Exs.P4 and P5 documents? Held that - Sec. 3 of the Limitation Act provides that it is the duty of the Court to dismiss any suit instituted appeal preferred or application made after the prescribed period although the limitation has not been set up as a defence. 11.2. The proposition laid down in the above case cannot be disputed. It is settled proposition of law that the acknowledgment of liability should be made before the expiry of the period of limitation and that if it is beyond the period of limitation it is of no use to the plaintiff. Apart from that it is also the duty of the Court to find out whether the suit claim is barred by limitation or not de hors the plea being raised by the other side. Doubtlessly it is the duty of the Court to look into the aspect of limitation and to reject the plaint if the claim is barred by limitation - we hereby extend the limitation and agree and undertake to repay the sum of rupees twenty five lakhs. Under Ex.P-5 four cheques have been issued. But proof has been placed to show that only three cheques have been dishonored (Exs.P-6 to P-8). When this was pointed out the learned counsel for the plaintiff submitted that the defendant has paid a sum of 10, 00, 000/- and the balance due is only 15, 00, 000/-. Therefore the suit has to be decreed for a sum of 15, 00, 000/- even though as per Ex.P5 the liability is 25, 00, 000/-. Suit is partly decreed.
Issues Involved:
1. Entitlement to a decree based on the defendant's admission under Order XII Rule 6 of the Civil Procedure Code. 2. Whether an acknowledgment of liability after the period of limitation under Section 25(3) of the Indian Contract Act constitutes a fresh contract. 3. Whether the suit is barred by limitation. 4. Whether the defendant's partial payment affects the liability. 5. Determination of the reliefs to which the parties are entitled. Detailed Analysis: 1. Entitlement to a Decree Based on Admission: The plaintiff sought a decree based on the defendant's admission of liability in the pleadings and documents (Exs.P-4 and P-5) under Order XII Rule 6 of the Civil Procedure Code. The court considered whether these admissions warranted a judgment on admission. The plaintiff's counsel argued that the defendant's failure to testify and challenge the admissions should lead to an adverse inference against the defendant, supporting the plaintiff's claim. 2. Acknowledgment of Liability and Fresh Contract: The court examined whether the acknowledgment of liability made after the limitation period could be considered a fresh contract under Section 25(3) of the Indian Contract Act. The essentials for this section include a written and signed promise to pay a debt that would be enforceable but for the limitation law. The court found that the defendant's letter dated 29.09.2008 (Ex.P-5) constituted such a promise, thereby creating a new cause of action and a fresh start of the limitation period. 3. Limitation: The defendant argued that the suit was barred by limitation, as the acknowledgment of liability was made after the limitation period had expired. The court noted that an acknowledgment must be made before the expiry of the limitation period to extend it. However, the court distinguished between a mere acknowledgment and a promise under Section 25(3), which can extend the limitation period. The court concluded that Ex.P-5 met the criteria under Section 25(3) and thus was valid, despite being made after the limitation period. 4. Partial Payment and Liability: The defendant claimed to have paid Rs. 15 lakhs in full settlement, which the plaintiff did not report to the court. However, no evidence was provided to substantiate this claim. The court found that the defendant admitted to borrowing the amount and failed to prove the alleged full settlement. The court determined that the defendant's admission and failure to prove full payment implied liability for the remaining amount. 5. Reliefs Entitled: The court concluded that the defendant was liable to pay the suit claim based on Ex.P-5 and the admissions in the written statement. The plaintiff initially sought Rs. 25,50,000/- but acknowledged receiving Rs. 10,00,000/-. Therefore, the court decreed the suit for the remaining Rs. 15,00,000/- with interest at 6% per annum from the date of the decree until payment. Conclusion: The court partly decreed the suit in favor of the plaintiff for Rs. 15,00,000/- with interest, based on the defendant's admissions and the valid promise under Section 25(3) of the Indian Contract Act, despite the initial claim being barred by limitation. The judgment emphasized the importance of written and signed promises in extending the limitation period and the significance of admissions in pleadings.
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